uk titans 50 50 memory income autocall february …€¦ · uk titans 50-50 memory income autocall...

Issuer and Counterparty: Natixis

Credit Ratings: Fitch: A, Moody’s: A2, S&P: A Source: Bloomberg 01.12.2017

Maximum Term: 6 years

Investment Structure: Quarterly Memory Income Autocall

Autocall opportunities: Quarterly (First observation at 3 months)

Autocall Trigger: 100% of initial level

Memory Income Rate: GBP = 2.00% Quarterly

Income Trigger: 50% of initial level

Capital Risk: Not capital protected

Capital Protection Barrier: 50% Final level (European style)

Underlying Basket Bloomberg Code

AstraZeneca PLC AZN LN Equity

Centrica PLC CNA LN Equity

HSBC Holdings PLC HSBA LN Equity

BP PLC BP/ LN Euity

Subscription Period: 01 Dec 2017 – 31 Jan 2018 (4.30pm UK Time)

Issue Price: 100%

Strike Date: 01 February 2018

Issue Date: 08 February 2018

1st Coupon Observation: 01 May 2018

1st Autocall Observation: 01 May 2018

Final Observation: 01 February 2024

Maturity Date: 08 February 2024

Denominations: 1,000 then lots of 1

ISIN: GBP = XS1636946383

Natixis

UK Titans 50-50 Memory Income Autocall February 2018

Factsheet

PRODUCT FACTS & FEATURES

KEY INFORMATION

IDAD Limited is Authorised and Regulated by the Financial Conduct Authority FCA FRN 740499. No part of this publication may be reproduced, copied or distributed without the prior permission in writing of IDAD. Returns from the structured products are at risk in the event of any of the institutions who provide securities for these products default on their financial obligations. All investors should seek advice from a suitably authorised financial adviser and investment must be made via an authorised counterparty.

INVESTMENT DESCRIPTION

A 6 year investment linked to the performance of 4 large cap UK stocks.

If on any of the quarterly observation dates, including the final observation, the closing levels of all the underlyings are at or above 50% of their initial levels, the income will be paid plus any previously missed income payments.

This investment will autocall and mature early if all underlyings are equal to or above their initial levels on any quarterly observation date starting at 3 months. If early maturity occurs, full capital is returned and the investment will end. If early maturity does not occur the investment will continue to the final observation date.

At the final observation date, if all underlyings are at or above 50% of their initial levels, then full capital is returned. If any underlying is below 50% of its original level, capital return will be reduced on a 1-for-1 basis. For example if the worst performing underlying has fallen to 40% of its original level, 40% of the capital will be returned.

BENEFITS

Opportunity for regular income payments even where the underlyings show significant falls.

A memory feature, whereby income previously unpaid, will be included when the income trigger is next activated.

Autocall feature potentially shortens the investment term and is triggered by minimal growth.

Early maturity provides an opportunity to re-assess client’s wealth strategy.

Daily pricing.

RISKS

The return is limited to the pre-defined investment terms.

The income payment is conditional upon the underlying performance.

There is a risk to capital should one of the underlyings breach the capital protection barrier on its Final Observation Date or in the event of an issuer default.

Should investors need to sell their investment before maturity, the trading price will likely mean they get back less than they invested.

Observations

1 to 23 Early Maturity =

Full capital returned

Income paid (plus any missed

Income)

Yes Yes

Are all underlyings at or above

50% of their initial levels? Income paid (plus any missed Income) and full capital returned

Final Observation

No = No income paid No = Investment Continues


100% of their initial levels?

If any are below 50%, capital is reduced on 1-for-1 basis

in-line with the worst performing underlying.

No = No income paid

Yes

HOW THE INVESTMENT WORKS


50% of their initial levels?

Natixis


Factsheet


Observation Dates (some payment dates may vary if a bank holiday occurs).

SUITABILITY This product may be suitable for investors who:

Are seeking the opportunity for higher returns than current cash rates at the time this product was launched.

Are seeking income rather than growth.

Understand and accept there is a risk to capital and how the Capital Protection Barrier works.

Understand the impact of global economic issues and how they will affect the product.

Understand the criteria which will determine the income payments.

Are looking to invest for the medium to long term, being happy to remain invested until maturity.

Can afford to have their cash invested for the full term of the Product.

Wish to use this investment as part of a well-diversified portfolio.

Understand that the returns are pre-defined and that they will forgo any growth in the underlyings which exceeds the fixed level available with this investment product.

Understand the risk to capital in the event of a counterparty default.

Should they need to sell their investment before maturity, accept that the trading price will likely mean they get back less than they invested.

Appreciate that income payments are conditional but understand that the memory feature can deliver previously missed income payments.

IDAD was established in 2002 and our approach from the outset, is what we call the "IDAD Difference”. The selection of the investments we offer is not decided in terms of profitability alone and when developing investment products, we favour evidence over dogma. We are happy to work with advisers and product providers alike to deliver a range of investment options to suit differing client wealth strategies. We’re proud of our approach to business as well as the investments delivered as a result of the "IDAD Difference”. We are committed to building upon our reputation for bringing benefits to all involved in the investment process, but most importantly to the clients.

Natixis: Natixis SA offers corporate, investment and financial services. The Bank services companies, financial institutions and

institutional investors. Natixis offers wholesale banking in the form of advising and financing, investment solutions in the form of asset

management, insurance, private banking and private equity, as well as other specialised financial services. Source: Bloomberg 01.12.2017

RATIONALE

Structured products are becoming increasingly popular for investors due to the wide variety of payoffs and levels of protection that can be achieved by the different types of structures that are available.

The opportunity for an income stream can be of key importance to investors as part of their wealth planning. The probability of an income payment being triggered is increased with this investment as an underlying needs to show a fall of 50% from its initial level on any observation date before the income stream is disrupted.

The investment also benefits from a memory feature so that if any income payments have missed being paid, they will catch-up the next time all underlyings are above 50% of their initial levels on an observation date.

These four underlyings have been selected in order to support the anticipated delivery of that income.

The autocall payoff can bring an early return of capital allowing the opportunity for a re-assessment of investment strategy. The value of this feature cannot be underestimated as it brings with it the opportunity to secure capital value, as well as the chance to take advantage of future market trends.

To manage the capital risk, a final level barrier set at 50% means an underlying must fall by more than 50% over 6 years before capital is at risk.

Observation Date Payment Date Income Trigger Autocall Trigger

Observation 1 01 May 2018 08 May 2018 50% 100%

Observation 2 01 August 2018 08 August 2018 50% 100%

Observation 3 01 November 2018 08 November 2018 50% 100%

Observation 4 01 February 2019 08 February 2019 50% 100%




















Final Observation 01 February 2024 08 February 2024 50% 50% European Barrier

Natixis


Factsheet

THE UNDERLYINGS

AstraZeneca PLC operates as a holding company. The Company, through its subsidiaries, researches, manufactures, and sells pharmaceutical and medical products. AstraZeneca focuses its operations on eight therapeutic areas, including gastrointestinal, oncology, cardiovascular, respiratory, central nervous system, pain control, anaesthesia and infection.

Centrica PLC is an integrated energy company offering a wide range of home and business energy solutions. The Company sources, generates, processes, stores, trades, saves, and supplies energy and provides a range of related services.

HSBC Holdings PLC is the holding company for the HSBC Group. The Company provides a variety of international banking and

financial services, including retail and corporate banking, trade, trusteeship, securities, custody, capital markets, treasury, private and

investment banking, and insurance. HSBC Holdings operates worldwide.

BP PLC is an oil and petrochemicals company. The Company explores for and produces oil and natural gas, refines, markets, and

supplies petroleum products, generates solar energy, and manufactures and markets chemicals. BP’s chemicals include terephthalic acid,

acetic acid, acrylonitrile, ethylene and polyethylene. Source: Bloomberg 01.12.2017

Past performance is not a reliable indicator of future performance and should not be used to assess the future returns or risks Source: Bloomberg 01.12.2017, Data period: 30.11.2001 to 30.11.2017

MOVEMENT IN THE UNDERLYINGS OVER A 16 YEAR PERIOD

16 Year Back-Testing

Back-testing shows how the investment would have performed historically using data from previous potential strike dates and observations. Although past performance is not an indication of future performance, it can give a factual insight into how the investment would have performed historically.

This 16 year back-test shows the historical data for a full 10 years of 6 year products that could reach the full term.

Of the 2,501 scenarios tested, 39.86% would reach the full term without autocalling and none of these would have breached the 50% final level barrier.

Every coupon observation has also been tested, and out of all 2,501 scenarios tested, 100% of the available coupons would have been paid thanks to the Memory Income feature.

Total Number

Tested

% Matured

Early

% To Reach

Final Date

% That Returned

Full Capital

% Barrier

Breach

% Of Coupons

Paid

Average Historic

Return GBP

2501 60.14% 39.86% 100% 0% 100% 8.00% p.a.


Autocall Test Autocalled % Autocall Test Autocalled % Autocall Test Autocalled % Autocall Test Autocalled %

3 Months 357 14.27% 21 Months 119 4.76% 39 Months 12 0.48% 57 Months 14 0.56%





18 Months 104 4.16% 36 Months 10 0.40% 54 Months 30 1.20%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

AstraZeneca PLC Centrica PLC HSBC Holdings PLC BP PLC

For further information please contact IDAD at:

Bellamy House, Winton Road, Petersfield, Hampshire. GU32 3HA

email: [email protected] telephone: +44(0)1730 263943 or visit our website www.idad.biz

DISCLAIMERS

This factsheet constitutes a financial promotion and has been issued and approved for the purpose of section 21 of the Financial Services and Markets Act

2000 by IDAD Limited which is Authorised and Regulated by the Financial Conduct Authority FCA FRN 740499. All information, including prices, analytical

data and opinions contained within this factsheet are believed to be correct, accurate and derived from reliable sources as at the date of the factsheet. The

information within this factsheet does not take into account the specific investment objective or financial situation of any person. This material should be

read and understood by the investor. If the investor is not a professional client or eligible counterparty as defined by the FCA or is considered a retail

investor, they should seek suitable financial advice before investing, to ascertain the full risks and terms associated with the investment. All investments

must be made via an authorised counterparty. All rights reserved. No part of this publication may be reproduced, copied or distributed without the prior

permission in writing of IDAD. Investments may go up or down in value and you may lose some or all of the amount invested. Past performance is not

necessarily a guide for the future. Returns from the structured products are at risk in the event of any of the institutions who provide securities for these

products default on their financial obligations.

Fees of up to 0.6% p.a. for the maximum term of the investment may be paid by the Issuer to cover marketing, distribution and advice costs. The fees have

been fully accounted for in the calculation of the Product’s structure. For example, this means that an investment of £10,000 will have any income/growth

payments and capital protection based on the full £10,000.

Any financial adviser shall fully disclose to its clients the existence, nature and amount of all fees and commissions it receives in respect of sales of the

Note. They must also confirm any such fee or commission complies with all applicable laws and regulations in all relevant jurisdictions and its receipt does

not conflict with applicable regulation or any duty to act in the best interest of any person to whom the professional financial adviser owes any such duty.

This sales brochure has not been prepared or reviewed by the Issuing Bank, the Issuer of the underlying securities or any of its affiliates and neither

Issuing Bank nor any of its affiliates or any of its directors, officers or agents accept any responsibility or liability for the contents of this sales brochure.

Selling Restrictions for Securities

The Purchaser of the Securities represents and agrees that the Securities shall not be offered, advertised, sold or otherwise transferred, either directly or indirectly to

any person in violation of economic sanctions or wider restrictions applicable to either the Purchaser or the Issuer. The information contained herein does not

constitute an offer or invitation to purchase securities (the “Securities”) by anyone in any jurisdiction in which such offer or invitation is not authorized or to any person

to whom it is unlawful to make such offer or invitation. The distribution of this document and the offering or sale of the Securities may be prohibited or restricted by law

in some jurisdictions. The Securities may not be publicly offered, sold or delivered within or from the jurisdiction of any country, except in accordance with the

applicable laws and other legal provisions, and provided further that the Issuer does not incur any obligations. The Issuer has not undertaken any steps, nor will the

Issuer undertake any steps, aimed at making the public offering of the Securities or their possession or the marketing of offering documents related to the Securities

legal in such jurisdiction if this requires special measures to be taken.

EEA: The requirements for a public offer in any member state of the European Economic Area ("EEA Member State”) are not fulfilled. Consequently, the Securities

may not be publicly offered in any of the EEA Member States except as explicitly provided under the prospectus exemptions of Directive 2003/71/EC (as amended by

Directive 2010/73/EU, to the extent implemented in a relevant EEA Member State ("2010 Amending Directive"), the "EU Directive") with respect to inter alia (i) an offer

of securities addressed solely to qualified investors as defined in the EU Directive, and/or (ii) an offer of securities addressed to fewer than 100, or, if the EEA Member

State has implemented the relevant provisions of the 2010 Amending Directive, 150 natural or legal persons per EEA Member State other than qualified investors, and/

or (iii) an offer of securities addressed to investors who acquire securities for a total consideration of at least EUR 50,000, or, if the EEA Member State has

implemented the relevant provisions of the 2010 Amending Directive, EUR 100,000, and/or (iv) an offer of securities whose denomination per unit amounts to at least

EUR 50,000 or, if the Relevant Member State has implemented the relevant provisions of the 2010 Amending Directive, EUR 100,000.

United States of America: This document is not for distribution, directly or indirectly, in or into the United States of America (“United States”) or its possessions. This

document is not an offer to sell securities, or the solicitation of any offer to buy securities, nor shall there be any offer of securities in the United States or in any

jurisdiction in which such offer or sale would be unlawful. The Securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended

(“Securities Act”), and may not be offered or sold in the United States absent registration or exemption from registration under the Securities Act.

Secondary Market

The Issuing bank will endeavour to provide quotes under normal market conditions for trading purposes upon request, subject to a Bid-Offer spread of 1%. On the secondary market, traded prices will include any accrued interest ("dirty prices") and are available daily.

Sale trades will settle 2 days after the trade date.

Trade orders should be sent to [email protected]

All trades will be settled direct with Natixis’ Euroclear a/c 16139

Natixis


Factsheet


mailto:[email protected]

http://www.idad.biz

uk titans 50 50 memory income autocall february …€¦ · uk titans 50-50 memory income autocall...

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